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  • Risk Management Orders

    Risk Management Orders

    As with all forms of trading, there is the potential to encounter losses when spread betting.

    The key to becoming a successful spread bettor is to minimise losses and learn from them.

    Through the Finspreads trading platform, you can access a wide range of Risk Management Orders to help limit your potential losses and give you peace of mind when trading.

    Use risk management orders for:

    • Trading volatile markets 
    • Not risking more than your initial deposit
    • Trading markets that are prone to gapping
    • Peace of mind when trading

    What is ‘Market Gapping’?

    Market gapping – also known as slippage – occurs when prices ‘gap’ between one price and the next, without trading at the prices in between.

    For example, when spread betting shares, your market may close at 1234 but open the next day at a lower price of 1224. If you were running a buy trade, you would incur a significant loss.

    Gapping can take place between the close and open of certain markets and also when market moving news emerges like a merger and acquisition or an important piece of economic data such as the US non-farm payrolls.

    Market gapping is an important consideration to take into account when deciding whether to use Risk Management Orders.

    In the section Closing Orders, we show you how you can guarantee that your trade be automatically closed out even if a market gaps.

    What is an Order?

    An order is an instruction to execute a trade when the price of a market reaches a trigger value set by you.

    For example, if you wanted to buy Company ABC shares when it reached a price of 200p, you can enter an Opening Buy Order and the Finspreads trading platform will automatically execute your trade when prices reach your target, in this example, 200p.

    Orders can help you to be more flexible with your spread betting decisions and manage your risk with the aim of limiting any potential losses without having to monitor prices constantly via your iPhone or desktop.

    As such, orders should be used as part of your risk management strategy within your spread betting plan.

    Tip: See our section on spread betting tips.

    Range of Risk Management Orders

    You can find out more about the Risk Management Orders available to you through the Finspreads trading platform and how you can use them by clicking below:

    Opening Orders 

    Closing Orders 

    Next Step: Opening Orders 
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